While foreign central banks and investors have held steady their nominal ownership of UST’s, they are not keeping pace with the increasing stock on a percentage basis.
We are looking at a confluence of negative catalysts for global equities in the near term. This time around it does not exclude US equities. As I have covered for an extended period, we eventually anticipate an inflationary public policy response earlier and more aggressively than would have occurred in prior times to any material economic contractions. This is due […]
It indicates that, if anything, the risk to changes in current market expectations is to the upside in terms of a potential rate hike by early summer 2019 rather than after the summer.
Japan’s Government Bond Yields Pressured Higher as BOJ Quietly Trims Purchases of Longer-Term Maturities
JGB’s Join the Higher Bond Yield March with a Bout of Bear Steepening Concentrated at the Long End The risk/reward prospects of owning longer-dated government bonds from current historically suppressed levels are as attractive as a bucket of dry sand after a sweaty jog. As Bloomberg notes, Japan’s bond market is enduring pressure due to recent BOJ policy adjustments. Japan […]
US Nominal GDP Is Burning Rubber at a 7.4% Annual Clip: The Public Will Get the Inflation It Thinks It Wants
Our thesis was driven by fiscal math gravity facing government budgets and game theory analysis for how central planners would react to it.
Total return on US investment grade (IG) corporate bonds has been negative all year. Half of IG bonds are rated BBB, which is one notch above junk. Deteriorating corporate credit conditions and upside inflation surprises suggest a poor risk/reward for incremental capital allocated to US IG bonds. This chart can be found here: